TravelWire On the evening of August 10th, Beijing time, Marriott released its Q2 earnings report: a net loss of $234 million and an 84.4% year-over-year decline in global RevPAR.

Reuters reported that the epidemic has caused Marriott, the world's largest hotel chain, to post its first quarterly loss in nearly nine years.

Arne M. Sorenson, Marriott's president and CEO, said that while Marriott's results are still y impacted by the outbreak, it is already seeing signs of a recovery in demand. Global RevPAR has rebounded from its April lows, improving from a 90% year-over-year decline in April to a 70% decline in July.

Occupancy has risen gradually from 11% for the week of April 11 to nearly 34% for the week of August 1st.

Marriott expects occupancy to gradually recover at its hotels around the world, but it will be years before it returns to pre-outbreak levels. That judgment is similar to that of old rival Hilton. Hilton reported Q2 earnings last week, and both hotel occupancy and RevPAR showed year-over-year growth.

Currently, 91% of Marriott's global hotels are open, with 74% of the world's hotels remaining open in April.

Nonetheless, in an interview with Forbes in July, Sorenson revealed that Marriott may make layoffs later this year, and it's impossible to predict how many employees will be affected.

Performance numbers

Marriott's second-quarter revenue totaled $1.464 billion, compared to $5.305 billion a year ago, a 72 percent decline.

Total revenue for the first half of the year was $6.145 billion, compared to $10.317 billion in the same period last year, a 40% decline.

Operating loss for the quarter was $154 million, compared to an operating profit of $409 million in the same period last year.

Net loss for the second quarter was $234 million, compared to a net profit of $232 million in the same period last year. Net loss for the first half of the year was $203 million, compared to a profit of $607 million in the same period last year.

Q2 adjusted EBITDA was $61 million, compared to $952 million in the same period last year, a 93.6% decline.

System-wide comparable RevPAR for Q2 was $19.11 overall, down 84.4% year-over-year, with North America down 83.6% and other regions down 86.7%.

Marriott added 11,400 rooms globally in the second quarter, with approximately 2,000 of those rooms converted from competing branded hotels, with net room additions up 4.1% year-over-year.

As of June 30, Marriott had 7,484 hotels and more than 1.4 million rooms globally; Marriott has nearly 3,000 hotels in the pipeline globally with approximately 510,000 rooms.

With the new crown epidemic, Marriott delayed the opening of some new hotels, but still expects to open 70 to 80 new hotels in the Asia-Pacific region this year.

Greater China has recovered the fastest

Sorenson said Marriott Greater China has recovered the fastest, with all of its hotels back open by early May. Occupancy is also now at 60%, compared to 70% at the same time last year; occupancy in February this year was in the single digits.

The recovery in Greater China was initially driven by leisure travel, particularly resorts and short-distance destinations within driving distance, and now travel demand and group travel are also increasing in the region.

According to Sorenson, the improvement in the Greater China market is evidence of the renewed demand for travel once people see that the epidemic is under control and travel restrictions are lifted.

It is important to note that while demand and RevPAR have improved in markets across the globe over the past few months, the recovery has not been at the same level everywhere, with markets that are more reliant on international arrivals recovering more slowly.

In the second quarter, Greater China's RevPAR was $32.83, a year-over-year decline of 60.3%; occupancy was 35.5%, a 32.2 percentage point decline; and ADR was $92.39, a year-over-year decline of 24.3%.

For the entire first half of the year, Greater China's RevPAR was $31.03, a year-over-year decline of 61.8%; occupancy was 30.1%, a year-over-year decline of 34.9 percentage points; and ADR was $102.92, a year-over-year decline of 17.5%.

Craig S. Smith, president of Marriott International Asia Pacific, said in July that for the Asia-Pacific region, it is expected to return to pre-epidemic levels next year, with the Chinese market expected to recover in the first quarter of 2021, and that he believes Asia will lead the global recovery.

In May, more than 130 hotels under the Marriott International Group went fully online with HungryMoney, opening high-end food and beverage takeout services in 49 cities across the country at the same time. Back in April, Marriott had launched a 588 RMB buffet breakfast monthly card at 148 stores, averaging only 19 RMB per meal.

At the end of the second quarter, Marriott still held about $4.4 billion in liquidity. The balance of cash and cash equivalents was $2.3 billion and unused lines under the revolving credit facility were $2.9 billion. For the same period, Marriott's total debt was $11.8 billion.

According to Reuters, Marriott expects to consume funds at a slower rate this year than originally anticipated as bookings have gradually recovered from the lows experienced during the outbreak.

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